News

The following article touches upon the guidelines issued by the Cyprus Security and Exchange Commission on Systems and Controls that Investment Firms operating from Cyprus should have in place.

GoalTrust can help existing and new clients in implementing such Systems and Controls.

The article can be found here.

The Council of Ministers of Cyprus with its decision on the 19th of March 2014 has laid down the requirements and condictions for naturilization of investors in Cyprus. This will allow high net wealth individuals to obtain a Cyprus citizenship and consequently a passport whcih will be valid in the EU.

The brochre can be found here.

The following brochure outlines

1. The benefits of registering an Investment Firm in Cyprus
2. The legal background
3. The conditions for authorization
4. The organizational requirements
5. The autorization process and conditions thereof.

The brochure can be downloaded here.

The requirements for registering and AIFM company are:

Initial capital must be at least EUR300.000. If an external manager, then the minimum initial capital is EUR125.000. If it manages assets of more than EUR250 mln then capital must increase by 0.02% on the amount in excess of 250mln with 10mln being the maximum.

The application for authorization must include

1. Information on the persons effectively conducting the business of AIFM
2. Information on the shareholders all the way to the beneficial owners
3. Programme of activity setting out the organizational structure of the AIFM
4. Remuneration policy
5. Arrangements made for delegation and sub delegation of functions.
6. Provide information on the AIF it intends to manage:
   1. Investment strategies, if fund of funds, use of leverage, risk profiles, member states or 3^rd countries where AIF is established.
   2. If AIF is a feeder fund
   3. Instruments of incorporation of the AIF
   4. Appointment of a depositary
   5. If already authorized as a UCITS then no documents required
   6. The commission shall inform ESMA of authorisations granted or withdrawn

The authorization process of AIFMs is as follows:

AIFM must be a limited liability company by shares under CAP 113 with registered office and central management in Cyprus. The AIFM can manage AIF after obtaining and maintaining authorization from the commission. External AIFMs may manage UCITS or engage in portfolio management and risk management as well as

1. administration (legal and fund management accounting services, customer inquiries, valuation and pricing, regulatory compliance monitoring, maintenance of unit/shareholder register, , distribution of income, unit/shares issues and redemptions, contract settlements, including certificate dispatch, record keeping)
2. marketing
3. activities related to the assets of the AIFs
4. By way of derogation maybe authorised to provide management of portfolios of investments including pension funds and non-core services such as investment advice, safe keeping and administration, reception and transmission of orders.

The Commission shall inform the applicant AIFM of the Republic, in writing, within three months of the submission of a complete application, whether or not authorisation has been granted. The Commission may prolong this period for up to three additional months, where it considers it necessary due to the specific circumstances of the case and after having notified the AIFM accordingly.

AIFMs of the Republic may start managing AIFs with investment strategies described in the application in the Republic, as soon as the authorisation is granted, but not earlier than one month after having submitted any mission information

A new Cyprus law passed this year, has introduced a register of trusts. Cyprus provides a solid law for setting up international trusts. The Security and Exchange commission, The Cyprus Barrister Association and the the Institute of Certified Public Accountants are the three competent authorities to register such trusts. For this reason, relevant regulations and fees have been issued for the registration of trusts in Cyprus. The Registers of Trusts are treated as confidential by the 3 authorities.

An article article in The Economist magazine declares that proposed revisions to the EU Savings Directive, together with the US Foreign Account Tax Compliance Act, amount to ‘the biggest overhaul of the legal treatment of trusts, since trust law was first developed in the twelfth century for Crusader knights wanting to safeguard their assets while they were away in the Holy Land.’

MoneyVal, the competent European authority for money laundering has cleared Cyprus of all suspicions related to money laundering. In early 2013, Eu officials expressed the opinion that Cyprus could be involved in money laundering activities mainly due to Russian deposits at its local institutions. The government reacting promptly, invited the competent European authority for antimoney laundering to visit Cyprus and assess the accusations.

MoneyVal appointed PWC to carry out the assessment under its supervision and the report was completed in April 2013 – Special Assessment Cyprus. The report effectively cleared Cyprus of any such accusations recognizing that the banks and professionals involved in International Business are well aware of Customer Due Diligence and Risks.

The OECD has published a new handbook to help officials spot indicators of possible bribery or corruption in the course of tax examinations and audits

On the 17/7/2013 the parliament enacted law (Ν.72(Ι)/2013)  which provides for the establishment of Medical companies. The law provides that any Medical Doctor that is registered with the Pancyprian Medical Association can establish a medical company under his name that will enable him/her to separate the medical activities form personal.

The benefits are both legal and tax. On the legal side, the company is a separate legal entity allowing it to maintain separate bank accounts, borrow money and encumbrance assets of the company always having limited liability.

On the tax side, tax is mitigated especially for high income doctors having a turnover of EUR70.000 or above.

Please contact us for any further information on this subject.